Goal With PMT Formula in MS Excel

Goal With PMT Formula in MS Excel

The PMT formula in MS Excel can be used in combination with the Goal Seek feature to find the interest rate for a loan with a specified payment amount.

Here's how to do it:

1. Set up a formula in a cell to calculate the payment using the PMT formula.
2. Select the cell that contains the payment calculation.
3. Go to the "Data" tab on the ribbon and click "What-If Analysis" in the "Data Tools" section.
4. Choose "Goal Seek."
5. In the "Set Cell" box, enter the cell address of the payment calculation.
6. In the "To Value" box, enter the payment amount you want to achieve.
7. In the "By Changing Cell" box, enter the cell address of the interest rate.
8. Click OK.

Excel will then solve for the interest rate that results in the desired payment amount. The final solution will be displayed in the "By Changing Cell".

Note: When using the PMT formula in combination with the Goal Seek feature, the present value, total number of payments, and future value should be fixed values in the formula. The interest rate is the only variable that changes.